Corporation Bank to raise up to Rs3,500 crore from share sale
Corporation Bank has received shareholders’ approval for fundraising by way of issuance of fresh shares and/or issuance of additional Tier I or Tier II capital as per Basel III guidelines
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New Delhi: State-owned Corporation Bank on Wednesday said it has got shareholders’ nod for raising up to Rs3,500 crore through share sale.
The lender’s annual general meeting (AGM) “approved raising of capital of the bank by way of issuance of fresh shares and/or issuance of additional Tier I or Tier II capital as per Basel III guidelines to the extent of Rs3,500 crore,” Corporation Bank said in a regulatory filing to stock exchanges.
For the fourth quarter ended March 2017, Corporation Bank posted a profit of Rs159.98 crore even though bad loans rose. In contrast, the bank had a net loss of Rs510.9 crore in the January-March quarter of 2015-16.
Gross NPAs as a percentage of total advances rose to 11.70% from 9.98% in the same quarter a year ago. Net NPAs also increased to 8.33% from 6.53% at the end of March 2015.
The bank had earlier said the fund will be raised either through allotment of equity shares on preferential basis or follow on public issue, rights issue, qualified institutional placement (QIP) or by way of additional tier-I or tier-II bonds or debt issue.
The bank had said it will determine the issue price at an appropriate time. The approval comes amid a flurry of similar deals in the banking space, which has seen SBI raise the largest QIP at over Rs15,000 crore, Kotak Mahindra Bank raising over Rs5,500 crore and Yes Bank’s Rs4,900 crore issue.